Custom, Excise & Service Tax Tribunal
M/S. Forder Technik India Pvt. Ltd vs Cce, Chennai I on 16 February, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/1301/2004
(Arising out of Order-in-Original No. 7/2004 dated 19.7.2004 passed by the Commissioner of Central Excise, Chennai)
M/s. Forder Technik India Pvt. Ltd. Appellant
Vs.
CCE, Chennai I Respondent
Appearance Shri R. Parthasarathy, Consultant for the Appellant Shri M. Rammohan Rao, DC (AR) for the Respondent CORAM Honble Shri D.N. Panda, Judicial Member Honble Shri R. Periasami, Technical Member Date of Hearing / Decision: 16.02.2015 Final Order No. 40179 / 2015 Per D.N. Panda Learned consultant explains that it was required for the appellant to install and erect heavy storage racks in the premises of various companies for storage of industrial engineering goods. Appellant had no manufacturing facility for which it had job worked relevant goods in piecemeal and brought the same from job workers to the site for installation and erection at the premises of its clients. Contractual obligation of appellant was not merely to make the rack but to ensure erection thereof at site. The goods in piecemeal does not give rise to the storage rack as is exhibited by the photograph submitted to the authority below. Only upon assembly of different components through welding process, the racks are embedded to earth and becomes heavy storage rack. Such racks are not easily detachable. In the event of dismantling, the system shall be damaged.
2. Appellant submits that all the above features involved in the activities carried out by the appellant bring out that the appellant was not manufacturer since the goods only upon being embedded to earth comes into existence as structure. The goods so attached to earth cease to become movable goods. Accordingly, there shall be no levy of excise duty on the racks in the circumstances of the case since ultimate object is to erect and install the goods manufactured and embedded to earth and its case is supported by the decision of Tribunal in the case of Thyssenkrupp Industries India Pvt. Ltd. Vs. CCE, Visakhapatnam 2005 (190) ELT 337 (Tri. Bang.). Therefore, the appeal may be allowed.
3. Revenues submission is that appellant was manufacturer and manufactured the goods in question indirectly through job worker, while he was principal manufacturer all along. Therefore, it cannot claim any immunity from liability. The goods as brought for erection were cleared as independent and movable goods for which those are liable to duty upon clearance. Revenue supports the entire adjudication.
4. Heard both sides and perused the records.
5. Bare perusal of the order, particularly paragraph 24 brings out the Board Circular which ought to have been appreciated by learned adjudicating authority to understand about the nature of the goods ultimately cleared by appellant. In para 4 of the order, learned adjudicating authority was of the opinion that the storage racks were not immovable property for no good reason stated by him in the order while in para 14 of the order, contention of the appellant was that storage racks came into being only when those were affixed to the earth which remained uncontroverted in the entire adjudication. Appellants submission was that the photographs submitted before the authority below demonstrated the nature of the goods. But that did not find appreciation by learned adjudicating authority when there was neither supply nor clearance of the goods made in piecemeal by appellant.
6. There is nothing on record to show that appellant cleared the goods in piecemeal with the intention to cause evasion of duty. The components of racks were welded at site for housing heavy engineering goods therein. It is common sense that a mere standing rack on the earth without being embedded thereto cannot accommodate heavy equipments for the storage in its bins. Such proposition alone calls for holding the goods as immovable property.
7. The appellant although was principal manufacturer of manufactured rack components, that having been embedded to earth upon welding to fulfill contractual obligation and such racks became inseparable without causing damage thereto when detachment is contemplated, that rules out appellants liability under Central Excise Act, 1944. Appellant was not mere supplier of goods. It had concurrent liability of embedding the supplied goods duly to earth to call the same as heavy storage racks.
8. In view of the above discussions, appeal is allowed. Consequential relief, if any, shall be admissible in accordance with law subject to verification of the deposit particulars.
(Dictated and pronounced in open court)
(R. PERIASAMI) (D.N. Panda)
Technical Member Judicial Member
Rex
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